More U.S. companies making significant changes to sales compensation plans, Willis Towers Watson survey finds

ARLINGTON, Va., Nov. 06, 2017 -- Citing dissatisfaction with their sales compensation plans, a growing number of U.S. companies plan to make significant changes to how they reward their sales forces, according to a survey by Willis Towers Watson (NASDAQ:WLTW), a leading global advisory, broking and solutions company.  Most of the significant changes revolve around using different performance measures, moving from commissions to quota-based incentive plans and changing the mix of pay. 

The survey found 42% of respondents plan to make significant changes to their sales incentive plans for 2018. That compares with just 24% that made major changes to their plans in the past year. Another 46% of companies are planning to make routine year-to-year modifications to their plans, versus 61% that made similar modest changes to their plans this past year. The survey, conducted in August and September, is based on responses from 39 companies in the U.S. and Canada.

“The need to attract and retain talented salespeople has never been greater, and having an effective compensation plan plays an integral part in achieving that goal,” said Joe Clarkson, a director with Willis Towers Watson’s Sales Effectiveness and Rewards practice. “Our research shows that while most companies are somewhat satisfied their plans are meeting their needs, they also agree there is room for improvement. Additionally, very few agree that they are fully satisfied with their plans, while one in four respondents indicated they are not very satisfied at all and say changes need to be made.”

According to the survey, the most significant change employers are making to their plans is changing the performance measures used to determine incentive awards (63%). More than a third (37%) are changing the mix of pay between fixed and variable while nearly a third (29%) are changing the incentive type from a commission plan to a quota-based bonus plan or vice versa.

Among companies making typical year-to-year modifications for next year, half are placing more weight on top-line measures such as revenue and volume while 29% are placing more emphasis on bottom-line profit measures. Roughly two in 10 (21%) are putting less weight on “non-sales” metrics.

“Given the many changes occurring in the marketplace, most organizations are taking a close look at their sales organizations, the roles they need their salespeople to play, as well as how they reward them,” said Ron Burke, a director with Willis Towers Watson’s Sales Effectiveness and Rewards practice.

About Willis Towers Watson

Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has more than 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

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